Needham & Company Starts Aixtron (AIXG) at Hold; Cannot Avoid MOCVD Overcapacity

Needham & Company initiates coverage on Aixtron (NASDAQ: AIXG) with a Hold.

Needham analyst says, "For many years, Aixtron was the market leader in MOCVD equipment, a key process in LED production. However, the company has steadily lost market share over the last 3 years; in 2011, we believe Veeco beat Aixtron by 1 point of share. Without any meaningful catalyst, we believe the two competitors will split evenly the MOCVD sector going forward. Due to substantial over-investment of capacity over the last 2 years, we believe MOCVD shipments will remain depressed over the next 12-18 months, despite continued growth of LED demand. We believe Aixtron’s new initiatives in non-LED areas will remain in the developmental stage, and see further downside to Street estimates owing to weakness in MOCVD. We believe incremental negative datapoints on the MOCVD sector will continue to weigh on the stock price, and we recommend investors wait for a bottom."

For an analyst ratings summary and ratings history on Aixtron click here. For more ratings news on Aixtron click here.

Shares of Aixtron closed at $12.22 yesterday.

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